Are you more worried than excited about the idea of retiring? You don’t need to be. The most common concern is whether you have saved enough to be able to retire safely and comfortably. So, if you are wondering – can I retire now? Here are the most important things you need to consider to start saving and to be sure you have an appropriate retirement plan in place to secure your future.
You first need to have reasonable retirement goals
One of the first issues that arises for clients when they start their retirement planning is trying to determine how much money they will need to retire. Whether you need sufficient savings or a good source of income, the goal is having a retirement plan that will allow you to still have the lifestyle you want 30 years from now. In many situations, the lack of sufficient financial resources in the future will lead to financial issues. On the other hand, some clients have an unreasonable goal that can never be reached because they believe they need more money than they actually do. Your estate planning attorney can help you create reasonable goals.
Making sure you will have adequate savings
It should go without saying that you need to start working on your retirement plan as early as possible. The sooner you start, the more you will have saved up when it is finally time to retire. Interest-bearing savings accounts can accrue more compound interest the longer they are opened and the more money that can be transferred to them.
Updating your retirement plan periodically is important
It is just as important to review your retirement plan every now and then, as it is to review your estate plan. Revisions are often required in order to make adjustments for any change of circumstances. Changes in the market that affect your investments, changes in your family circumstances, the addition of new family members or the loss of beneficiaries are all reasons to review and modify your retirement plan. Answering the question – Can I retire now – is not the end of the process. You need to continue to adjust your plan to fit your ever-changing needs.
Consider the possible need for long-term health care
The unfortunate reality is that, during retirement, medical expenses alone have the potential to exhaust all of your savings. As you age, the need for medical care will undoubtedly increase. If you do not plan ahead, you may be facing financial problems during retirement. Some reports indicate that almost 70% of retired individuals eventually have a need for long-term health care services. For that reason, it is crucial that you consider the possibility that you will need long-term care options. Include those long-term care needs and the expenses they will create as part of your retirement plan. By doing that, you will be sure you have sufficient funds to cover the costs during retirement.
Be sure to plan for higher health care costs in the future
A major issue in retirement planning is having sufficient financial resources to handle the cost of health care, especially when those costs are likely to increase over the next 20 or 30 years. There is no question that seniors typically need more health care services. That fact needs to be a part of your retirement planning equation. The problem comes in when you fail to consider the near certainty that health care costs will increase over time. If you do not take that increase into consideration as part of your retirement plan, then you may be looking at financial problems later on.
According to some reports, a 65-year-old couple retiring now is likely to incur nearly $300,000.00 in health care costs. It is hard to predict what how much that will be in 20 or 30 years. A common misconception is that Medicare or Medicaid will be enough to cover your medical expenses during retirement. Instead, you must be proactive and plan ahead as much as possible.
What types of retirement planning strategies are available?
The attorneys at Gaughan & Connealy are available to help you get started planning for retirement or to review your retirement plan and explain the advantages and disadvantages of your available options. Basic retirement planning services include:
- Beneficiary designations
- Incorporating retirement goals into an estate plan
- Early withdrawal from retirement plans
- Pension plans
One component of retirement planning also includes choosing who the beneficiaries of your retirement assets will be. These decisions could have significant tax consequences.
Download our FREE estate planning worksheet today! If you have questions regarding retirement, or any other estate planning matters, contact Gaughan & Connealy for a consultation either online or by calling us at (913) 262-2000.